Insurance buyers in the energy sector are entering 2026 in a strong position to optimize both premiums and coverage, according to the Energy Market Review Update from Willis, a WTW business.
According to the report, the upstream energy insurance market continues to deliver profitability for insurers following another year of low loss activity, supported by stronger risk management practices and higher asset quality. Market softening has accelerated since the April Energy Market Review, with insurers prioritzing retention of well-managed risks and rewarding long-term client relationships.
Downstream energy insurers, however, have faced around US$3.5 billion in losses this cycle, mostly in the US refining sector. These claims have already equaled market premiums, putting clients with US exposure under greater scrutiny. Energy companies with clean loss histories benefit from favourable renewal terms, while those with prior losses face more conservative underwriting, though rate reductions remain possible. Observed rate reductions range from 10% to 15% on standard renewals to 20% to 50% in competitive tenders.
Willis identifies key trends likely to influence energy insurance in 2026. Upstream construction placements continue to carry long-tail risk, but underwriters are increasingly accommodating where operational relationships exist. Subsea construction remains capacity-constrained, creating a micro-hard market that may prompt selective underwriting to boost premium income. Upstream reinsurance treaty renewals will signal insurers’ strategies for balancing growth and capital allocation.
Liability insurance is also evolving. Healthy capacity and positive loss ratios have softened international liability markets, contrasting with hardening US casualty conditions driven by social inflation and nuclear verdicts. European insurers are monitoring new legislation easing class actions, which could materially impact liability claims costs.
Rupert Mackenzie, global head of natural resources at Willis, said insurers reported strong Q3 2025 results, and “the ongoing oversupply in capacity and insurer appetite for growth is simplifying previously complex placement structures, yielding premium savings for clients. Energy companies renewing in Q4 2025 and looking ahead to 2026 have leverage to negotiate both coverage terms and pricing.”
The report underscored that energy insurance buyers who demonstrate strong risk management, maintain operational relationships, and engage actively with insurers are positioned to secure optimal coverage and pricing as the market softens.
